Shariah banking: Indonesia's 'bold plans' for a troubled industry

Mixed prospects for Islamic-friendly finance in world's most populous Muslim country

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An employee at BRI Syariah bank in Jakarta: The government is trying to boost growth in the Islamic fiance sector. (AFP/Jiji)

ERWIDA MAULIA, Nikkei staff writer

JAKARTA -- In the world’s most populous Muslim nation, and under an administration keen to develop its Islamic economy, Indonesia’s oldest Sharia-compliant bank should have stood strong.

Instead, Bank Muamalat almost collapsed earlier this year under the weight of plunging profits and bad financing -- even as the government was making a push to quadruple the size of Sharia banking in Indonesia in just five years.

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